Partner Article

Ten pitfalls to avoid when outsourcing construction work

Gary Plant, Managing Director of Altius Vendor Assessment shares the pitfalls you should avoid when assessing contractors - to ensure compliance and effective risk management.

While many organisations have a firm grip on risk management within their own business, it’s a different story when it comes to the wider supply chain, where effective monitoring of health and safety standards, and environmental and commercial performance, are all critical.

Complete supply chain visibility is the aim and this requires a robust system of standards and pre-qualification checks for both contractors and sub-contractors. It isn’t sufficient to delegate this task entirely to your contractors. If the cracks start to show, your company could be exposed to risk and liability and the reputational damage that follows.

You should also introduce a 24/7/365 compliance system, rather than relying on periodic checks.

Some of the key questions you should ask when assessing contractors and sub-contractors are:

1. Do your contractors and sub-contractors have the necessary insurance for working at heights? (this is of course, no substitute for checks and supervision on your site).

2. Is your contractor’s asbestos awareness training adequate? Have you checked the course content, or has it been approved by organisations such as UKATA or IATP? Is refresher training provided and are all new starters covered?

3. Have you checked that your contractors are competent to work with electricity? Do you know if they are a member of a recognised group such as NICEIC or the ECA?

4. Does your contractor have a sustainable and ethical sourcing policy?

5. Is your contractor disposing of waste responsibly? Do they have the up to date licenses?

6. How financially solvent is your supplier? Do you continuously track their financial health to ensure that they can fulfil their work commitments?

7. If you are dealing with a large contracting business with multiple divisions, are you certain that their insurance cover applies to the individual business you are dealing with? Can you be certain that insurances are always up to date?

8. Is professional indemnity insurance set at the right level for the risks your supplier might face?

9. Do your contractors have the records to demonstrate they comply with applicable legislation?

10. Do your contractors check their staff are competent to safely perform the work they are asked to do?

The Altius Vendor Assessment system and compliance software reduces risk and liability, cuts costs and saves time. It can manage compliance on many parameters - from health and safety and commercial risk - to bribery and corruption policies, information security, CSR, quality, and environmental and employment law. Altius is a member of Safety Schemes in Procurement (SSIP) and provides consultancy and advice on supplier management to organisations such as the Rail Safety and Standards Board.

Further information: www.altiusva.com

This was posted in Bdaily's Members' News section by Altius .